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Denver Shops Craft Ways to Stay in the Black

Published September 30, 2011

DENVER, CO (BRAIN)—The Denver suburbs are home to small clusters of shops, each with a unique formula to stay in business.

Location, location, location. That played a big factor when Vint Schoenfeldt and Eric Krell partnered with Giant to open the brand’s first concept store in Littleton. In a destination shopping center that also houses an Apple Store, Panera Bread and Pottery Barn and only steps from the Platte River Trail, the store draws not only cyclists but shoppers with high retail expectations.

And Giant Cycling World Denver doesn’t disappoint. The inside of the store was built from the ground up and every detail carefully thought out—from well-defined women’s and men’s sections, to customized wall and island fixtures which can be mixed and matched, down to the one-of-a-kind wood flooring. Giant picked up the cost of the build out, but the business is not company owned.

Giant director of sales and business development Gregg Frederick said the company prefers to sell through IBDs and resorts to this concept store model in markets where it’s under-represented. Giant opened a second concept store that’s company owned in Boston shortly after.

“We’re learning a lot still,” said Frederick, who called it an incubator store. “For us, this is a way for us as a company to learn about retail operations and help all retailers not just our concept stores.” The idea is to hone in on inventory maintenance and stocking levels to make just-in-time ordering as seamless as possible. Giant reps work closely with store management on product selection and ordering.

The Littleton store carries only Giant bikes and is a showcase of its product depth, from kids bikes just under $300 to $13,000 racing machines. Open for just a year and three months, Shoenfeldt said so far the store is meeting sales projections.

“Giant is awesome to work with,” he said. “It’s helpful to have a partner. Without their support, opening a shop on our own, we would have struggled,” he admits.

Though it opened in a down economy that was part of the reason Shoenfeldt was able to secure such a desirable retail space as leasing rates dropped.

Marc Eisenberg began sweeping floors in a bike shop at the age of 15. Today, the 55-year-old is keeping an eye on Bike Source, a 9-store chain of stores plus a seasonal operation at Winter Park Resort in the Colorado Rockies.

What makes Bike Source unique is its far-flung operations. While the Denver area is home to three stores as well as the company’s corporate headquarters, there are three more in Columbus, Ohio, two in Kansas City, and one in Charlotte, North Carolina.

Thursday’s Dealer Tour dropped in on Eisenberg at the company’s Littleton store—a 20,000-square-foot operation, which includes 8,000 square-feet of storage. While Eisenberg points out that the store isn’t a true Specialized concept store, it bleeds the Red S from almost every vantage point. But he also stocks some Ridleys and Electras plus a variety of non-Specialized accessories.

Located in a bustling shopping mall in this Denver suburb, the store’s size offers great line-of-sight visuals as customers walk in. It’s a former Linens n’ Things outlet and when that company pulled the plug on more than 500 storefronts, Eisenberg moved in two years ago. His next-door neighbor is Lowe’s, a major home improvement outlet.

While Lowe’s and other stores in the sprawling mall attracts hundreds of shoppers every day, Eisenberg points out that what’s important about the location is that it “reminds” visitors that there’s also a bicycle store in the mall.

While Bike Source is in a high-traffic, highly competitive location (REI, Bicycle Village, Big Kahuna and Performance are nearby), Campus Bicycles sits on the corner of a residential street with only four authorized parking spaces. One wall of the 5,000-square-foot store is just inches from a home next door. And as Bobby Verenna said as he took us on a tour: “We have no room to expand.”

Verenna, along with co-owner Mark Velat, sell Giant, Trek, Electra, Orbea and Bike Friday—a brand that Verenna said sells surprisingly well. Still, the store is a quintessential neighborhood shop. And the store’s motto says it all: “Large enough to meet all your cycling needs; small enough to remember your name.” The store is so focused on neighborhood residents that it keeps a stock of dog biscuits for a neighbor who walks her dog past the store every day. “He whines when he gets near,” Verenna said.

Campus Bicycles draws its customers from an area defined by Washington Park, Platt Park and Denver University. But Verenna explains that the campus, about two miles away, is small with some 5,000 students. “We always joked that students there bought BMWs not bikes,” he said. That’s changing as more students park their Beemers to buy cruisers or commuter bikes.

The surrounding neighborhoods are home to upwardly mobile professionals with sufficient disposal income to keep the cash registers ringing. And as with most shops today, service is as important as the bikes it sells. Even with six mechanic bays, the store will have repairs backed up for as many as seven days.

Gene Hodges opened his third Denver area Treads Bicycle Outfitters store in January 2008, at the start of the recession. He said he is finishing his best year ever, a common report from the Front Range retailers we visited over the past two days.

But given the number of shuttered retail spaces around his new Lakewood store, the success of bicycle retail is surprising. And his new store sends bikes out the door at an average price of $800, higher than his other two stores.

“We are in a nice part of town and that helps. But Denver is a saturated bike market and I don’t really know why sales have improved when the economy hasn’t,” Hodges said.

Dual sport sales were the growth leader at the store along with strong 29er sales. And like many other area retailers, his customers are buying their second or third bike.

Treads Bicycle Outfitters is also one of the few Denver dealers carrying Cannondale, though Hodges is quick to point out that REI just down the street also carries the brand. Hodgers is also is longtime Trek dealer. “I’ve carried Cannondale since 1992 and the company has been great to deal with. I don’t like it that they are at REI, but people still come in the door looking for a Cannondale,” he added.

Steady Cannondale sales, good service and a market in which consumers will cut the grocery bill to upgrade a bike keeps the shop busy in a tough retail climate.

For more photos from Day 2 of the BRAIN Denver Dealer Tour, click on the link above for our Facebook photo album.